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SEPTEMBER 2013 - VOL. 29 NO. 9
(Continued on page 2.)
by Erica Meltzer, Boulder Daily Camera
Staff Writer, August 7, 2013
Boulder voters are likely to be asked
to approve a $214 million debt limit
on the acquisition of Xcel Energy’s
physical assets this November.
The debt limit is not intended to represent
Boulder’s estimates of the actual acquisition
costs - city officials hinted they believe those
costs will be lower - and it explicitly does not
include possible stranded costs, which Xcel
Energy says Boulder will owe if it forms
a municipal utility. Stranded costs are
intended to compensate for investments
in power generation that will no longer
be needed.
The Boulder City Council voted unanimously
early Wednesday morning after a lengthy
meeting dedicated to municipalization
issues to place the debt limit measure
on the November ballot.
The charter amendment was drafted in
response to a citizen-initiated charter
amendment with support from Xcel Energy
that would require voters to approve a total
debt limit for the utility and would require that
affected residents of unincorporated Boulder
County be allowed to vote in the debt limit
election if the utility is to serve areas outside
the city limits.
Proponents of a municipal utility believe
that measure would make it difficult to form
or operate a municipal utility, as the utility
would not be able to issue emergency debt
and elections could only be held in odd years.
The city charter amendment is intended
to both respond to the desire for some sort
of voter-approved debt limit and to compete
with the citizen-initiated amendment. In
areas where the two measures conflict,
the one that gets the most votes prevails.
Boulder to ask voters for $214 million
debt limit to buy Xcel system
Attorneys for the city had recommended against
including a specific dollar amount in the debt
limit because they said it could give Xcel Energy
too much information about how much the city
is willing to pay to acquire its assets. Instead,
they recommended the City Council put forward
a charter amendment that would require that debt
not be issued unless there will be enough revenue
to cover the operating costs and the debt service,
plus a reserve of 25 percent of the debt service
amount.
The debt test is the same as the charter
requirement for starting a municipal utility
that voters narrowly approved in 2011. But
City Council members said they believed
voters wanted to see a number. “This is our
commitment to the voters that there will be a
ceiling on what we’ll pay to get this thing off
the ground,” Councilman Macon Cowles said.
In the city’s modeling, the municipal utility can
still offer competitive rates with Xcel Energy
even under more unfavorable energy prices
with “fixed costs” at $214 million or less.
The debt limit in the charter amendment
provides even more wiggle room because
the modeling included stranded costs and
the charter amendment does not.
City officials believe they can mitigate
stranded costs by buying power from Xcel,
though federal regulators recently denied a
request for a declaratory judgment on the issue.
The city charter amendment would also allow
county residents who are utility customers
to serve on the utility advisory board and
makes (it) explicit that one of the jobs of the
advisory board it to make recommendations
on rates to the City Council.
It does not contain a provision to allow for
county residents to vote in elections related
to the utility, though it states the city’s intent
to pursue legislative changes that would allow
for customer choice in the future.
by Brent Barker
APPA Public Power Magazine, September 2013
issue, Vol. 71, No. 6, (July 15, 2013)
The sole customer. “It took longer than anyone
imagined but it was worth it,” Kovacik said.
“Omni hung true with us through the delay,
and [is] now competitive again. They were
going to add a third shift, but had hesitated
over the cost of power. Now they can manage
the power flow the way they want. They
don't have to worry about First Energy’s peaks
and whether it is going to be more expensive.
Omni is our one shining little light.”
OmniSource is one of North America’s
largest processors and distributors of scrap
and secondary metals. The Toledo facilities
are centrally located and employ about
10 percent of OmniSource’s workforce.
Collectively, OmniSource facilities process
7 million tons of ferrous scrap per year and
more than one billion pounds of nonferrous
metals. They also maintain a national
brokerage and trading service for metal
buyers and sellers, providing market
intelligence and insights needed
to optimize transactions.
Grass roots aggregation. The roots of
Toledo’s energy activism go back to the
feverish days of deregulation in 1999 and 2000.
As city attorney, Kovacik was told to take the
lead. “When I started, I didn’t know much
about the business, but electricity was hot,
deregulation was happening and someone
said you have to go to the [Public Utility
Commission] and intervene in these cases,
because we have such high rates. We had
decades of legacy-debt hanging over us
from Toledo
Edison’s
construction
of the
Davis-Besse
nuclear plant.”
Toledo Public Power’s
First Customer cont.

SEPTEMBER 2013 - VOL. 29 NO. 9
(Continued on page 2.)
by Erica Meltzer, Boulder Daily Camera
Staff Writer, August 7, 2013
Boulder voters are likely to be asked
to approve a $214 million debt limit
on the acquisition of Xcel Energy’s
physical assets this November.
The debt limit is not intended to represent
Boulder’s estimates of the actual acquisition
costs - city officials hinted they believe those
costs will be lower - and it explicitly does not
include possible stranded costs, which Xcel
Energy says Boulder will owe if it forms
a municipal utility. Stranded costs are
intended to compensate for investments
in power generation that will no longer
be needed.
The Boulder City Council voted unanimously
early Wednesday morning after a lengthy
meeting dedicated to municipalization
issues to place the debt limit measure
on the November ballot.
The charter amendment was drafted in
response to a citizen-initiated charter
amendment with support from Xcel Energy
that would require voters to approve a total
debt limit for the utility and would require that
affected residents of unincorporated Boulder
County be allowed to vote in the debt limit
election if the utility is to serve areas outside
the city limits.
Proponents of a municipal utility believe
that measure would make it difficult to form
or operate a municipal utility, as the utility
would not be able to issue emergency debt
and elections could only be held in odd years.
The city charter amendment is intended
to both respond to the desire for some sort
of voter-approved debt limit and to compete
with the citizen-initiated amendment. In
areas where the two measures conflict,
the one that gets the most votes prevails.
Boulder to ask voters for $214 million
debt limit to buy Xcel system
Attorneys for the city had recommended against
including a specific dollar amount in the debt
limit because they said it could give Xcel Energy
too much information about how much the city
is willing to pay to acquire its assets. Instead,
they recommended the City Council put forward
a charter amendment that would require that debt
not be issued unless there will be enough revenue
to cover the operating costs and the debt service,
plus a reserve of 25 percent of the debt service
amount.
The debt test is the same as the charter
requirement for starting a municipal utility
that voters narrowly approved in 2011. But
City Council members said they believed
voters wanted to see a number. “This is our
commitment to the voters that there will be a
ceiling on what we’ll pay to get this thing off
the ground,” Councilman Macon Cowles said.
In the city’s modeling, the municipal utility can
still offer competitive rates with Xcel Energy
even under more unfavorable energy prices
with “fixed costs” at $214 million or less.
The debt limit in the charter amendment
provides even more wiggle room because
the modeling included stranded costs and
the charter amendment does not.
City officials believe they can mitigate
stranded costs by buying power from Xcel,
though federal regulators recently denied a
request for a declaratory judgment on the issue.
The city charter amendment would also allow
county residents who are utility customers
to serve on the utility advisory board and
makes (it) explicit that one of the jobs of the
advisory board it to make recommendations
on rates to the City Council.
It does not contain a provision to allow for
county residents to vote in elections related
to the utility, though it states the city’s intent
to pursue legislative changes that would allow
for customer choice in the future.
by Brent Barker
APPA Public Power Magazine, September 2013
issue, Vol. 71, No. 6, (July 15, 2013)
The sole customer. “It took longer than anyone
imagined but it was worth it,” Kovacik said.
“Omni hung true with us through the delay,
and [is] now competitive again. They were
going to add a third shift, but had hesitated
over the cost of power. Now they can manage
the power flow the way they want. They
don't have to worry about First Energy’s peaks
and whether it is going to be more expensive.
Omni is our one shining little light.”
OmniSource is one of North America’s
largest processors and distributors of scrap
and secondary metals. The Toledo facilities
are centrally located and employ about
10 percent of OmniSource’s workforce.
Collectively, OmniSource facilities process
7 million tons of ferrous scrap per year and
more than one billion pounds of nonferrous
metals. They also maintain a national
brokerage and trading service for metal
buyers and sellers, providing market
intelligence and insights needed
to optimize transactions.
Grass roots aggregation. The roots of
Toledo’s energy activism go back to the
feverish days of deregulation in 1999 and 2000.
As city attorney, Kovacik was told to take the
lead. “When I started, I didn’t know much
about the business, but electricity was hot,
deregulation was happening and someone
said you have to go to the [Public Utility
Commission] and intervene in these cases,
because we have such high rates. We had
decades of legacy-debt hanging over us
from Toledo
Edison’s
construction
of the
Davis-Besse
nuclear plant.”
Toledo Public Power’s
First Customer cont.